Information technology (IT) stocks took a hit in trade on Thursday, after TCS warned of a slowdown in discretionary spending in the BFSI (banking and financial services) vertical. The stock lost 6% in morning trade to hit a low of Rs 2,284 levels on the National Stock Exchange (NSE). The vertical contributed nearly 40% to the company’s revenues in the first quarter ended June 2016, reports suggest.
HCL Technologies, Tech Mahindra and Infosys were among the other losers that lost 2.2 – 2.6%. Wipro, at Rs 470.2 hit its 52-week low on the NSE in intra-day deals. A fall in these heavyweights dragged the Nifty IT index nearly 3% lower in intra-day deals on Thursday.
Since the presentation of the Union Budget in February 2016 when the sentiment turned positive for the overall markets, IT stocks have remained underperformers. The Nifty IT index has been mostly flat – up a modest 0.3% till close of trade on September 07, as compared to 27% rise in the Nifty50.
Earlier, Infosys had lowered its annual revenue guidance for FY17 while announcing its results for the June 2016 quarter to 10.5 – 12% in constant currency (CC) terms, as against a market expectation of 11.5 – 13.5%.
Given the growth concerns, analysts say that the sector seems to be facing more headwinds than tailwinds, with a high probability of those read more..
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